PTCL
is a telecom giant of more than half a century age and continues by
flourishing since the day of its inception

By
MUSTAFA KAMAL PASHA*
Sep 02 - 08, 2002

The Minister of Finance, Mr. Shaukat
Aziz, in his
Budget 2002-03 speech has announced to include Information Technology as
one of the four-priority sector selected for unleashing the growth
process in the country. The IT landscape unleashing in the country has
been radically altered in the last three years. The Information
Technology policy was given early to chart the course of initiatives,
government planned to adopt for the promotion of IT sector/ culture in
the country. These priority areas, in which these initiatives are
adopted, include, HRD, telecom infrastructure, legal framework for IT
sector and marketing support for IT sector and marketing support for IT
& software exports. In each of these areas government has taken
significant measures to lift the profile of IT sector.

The base of Information Technology is Communication.
In our country, for such communication, Pakistan Telecommunication
Company Ltd. (PTCL) is the hub of all activities from various types of
landline communication to satellite communication, PTCL is the only
telecom giant, which can meet the ever growing needs of IT sector. It
earned a profit of Rs 18 billion during 2001-02, which represented an
increase of 38 per cent over the previous year. Under the ongoing
economic condition in the country and keeping in view the performance of
the state owned corporations, the performance of PTCL is unmatchable.
There might be one hundered and one problems with it, and of course
there are problems with all service providing institutions everywhere in
the world, but the performance of PTCL with reference to any standard is
commendable. Recently released, nine-monthly financial results of PTCL
for its shareholders and general public are a clear indication of the
performance of state-owned telecom giant.

As a whole it gives a bright and encouraging picture
of the company. According to the issued report, PTCL has added Rs (7796)
million to the national exchequer during the past (9) months as compared
to Rs (6521) millions during the same period of post financial years
similarly profit after Tax is to the tune of Rs (13085) as compared to
the profit of Rs (12298) millions for the same period during the
previous financial year.

According to the issued balance sheet, the volume of
long term loans has come down from Rs. (1362) million to Rs (1058)
millions, during the nine month, under review. On the other hand volume
of long term investment has gone from Rs (5786) million to Rs (6058)
millions. It means the management has successfully reduced the quantum
of loans and at the same time added up to the long-term investment.

The PTCL is the only Public Sector Company,
constantly running in profit and adding billions of rupees into the
national exchequer. The other pertinent factor in this regard is the
investment made by the company for vertical and horizontal development
of the company. Multilateral officials, at Pakistan investment
conference held in Paris last week had stated that Pakistan Telecom
sector has a potential to attract (15) billion dollars foreign direct
investment. The conference was jointly organized by the World Bank and
the government of Pakistan on" Business climate and opportunities
for business in Pakistan". The experts were of the unanimous
opinion that telecom sector alone in Pakistan has a potential of
attracting (15) billion new FDI in Pakistan.

The PTCL is not only the market leader and volume
leader at the stock market in Pakistan but a trendsetter as well. The
increase in the volume of profit, according to stock market experts is
due to the introduction of PTCL per-paid calling cards,
interconnectivity agreement with the mobile operators in Pakistan and
decline in US dollar rate.

The PTCL management, under the dynamic leadership of
its Chairman Akhtar Ahmad Bajwa is fully aware of the ground realities,
which would start appearing in Jan 2003 after the end of PTCL monopoly
on December 31, 2002.

Two views are prevalent regarding the new situation
arising after the end of monopoly of PTCL. Experts and a group of
telecom sector analysts say that the new situation would expose the
weaknesses, of the state owned telecom giant that have been piling up
during the last half a century. Civil bureaucracy has run the PTCL like
other departments. (On the other hand the present PTCL management is
very much sure about the company's performance and efficiency, even
after the end of monopoly. (Akhtar Ahmad Bajwa the present Chairman of
the PTCL confidently explains the position of the company. He says, we
are not operating in isolation but in the world of realities. Present
PTCL is headed and run by most of the competent and professionally
committed people. Right from the Chairman, Members to DGs and GMs the
most qualified, experienced and dedicated personnel are there to look
after the PTCL affairs in accordance with the changing scenario in the
telecom sector. My team has an experience of working about 30 years in
the telecom sector. We have been working for T & T department and
now running the state of the art PTCL. We are well versed with the most
modern telecom technologies. We have not only witnessed the development
process but have been an active partner in it. We have gone through the
stages of development from copper wire techniques to the optic fiber
technology to provide telephony services to millions of customers across
the country, Chairman PTCL said.

Practically PTCL is already passing through
competition in cellular phone, pre-paid card, and Internet market.
Telephone industries of Pakistan & CTI are subsidiaries of PTCL and
already working in the competitive environment. U- Phone has
revolutionized the cell- phone environment Phone set and allied services
equipment manufactured by TIP & CTI are market leaders. Services
provided by the PTCL, to its clients are comparatively cheaper and
dependable. Basically PTCL is a telephony services provider. Other
services including satellite, cable and data transfer communication are
allied. The whole communications net work, in Pakistan is owned by the
PTCL. It has taken more than half a century to develop a net work of
more than (4) million lines throughout Pakistan. PTCL has been providing
communication facilities to Afghan Government also", Bajwa
stressed.

FINANCIAL SIZE OF
TELECOM INDUSTRY IN PAKISTAN (1999-00 & 2001-02)

Operator

Rs in million 1999-00

Rs in million 2000-01

Percentage Growth

Listed

144154

153372

6.4

Mobile

14059

18686

33.0

ISP's

7968

8796

10.4

CTI, TIP

3172

3635

14.6

Payphone

5196

5738

10.4

Total

174549

190269

9.0

TURNOVER OF TELECOM
INDUSTRY IN PAKISTAN

Operator

Rupees in million
1999-00

Rupees in million
2000-01

Percentage Growth

Listed

62866

74505

18.5

Mobile

4053

7768

91.6

ISP's

486

539

10.9

CTI, TIP

3342

3869

15.7

Payphone

891

1235

38.6

Total

71638

87916

22.7

Pakistan Telecommunication Company Ltd.
(PTCL) has
set the revenue target of Rs 69 billion for the next fiscal year of
2002-2003 which may be termed a 'hard target' as its monopoly is ending
by the current calendar year.

The government of Pakistan, in accordance with its
commitment with World Trade Organization (WTO), will maintain PTCL's
exclusivity in the provision of domestic, long distance and
international telephone services till December 31,2002. After it the
world telecom operators would find level playing field in Pakistan.

In the presence of world-reputed competitors, the
huge target of Rs 69 billion would not be a piece of cake, when most of
its corporate subscribers might switch over to other companies, due to
various considerations.

In the last fiscal year 2000-2001, the company had
reached the mark of Rs 62.04 billion and is now inching towards the set
target of Rs 65 billion in the current fiscal year of 2001-2002.

Following the expiry of PTCL exclusive rights, the
government proposes to encourage full competition in the
telecommunication sector. Licenses will be granted to applicants who
meet the objective criteria specified and comply with the provisions of
the licensing rules, which are to be issued pursuant to the
telecommunication act.

It is worth mentioning here that total earnings have
improved inspite of the gradual reduction in International Accounting,
Rates (IAR). The PTCL is endeavouring to minimize the impact of
declining TAR by taking proactive measures to enhance the international
incoming traffic volume mainly by improving call-completion ratios and
expanding/adding international circuits on major traffic routes.

Complaints of wrong and excessive billing,
disconnection despite payment, delay in fault, attendance, lack of
courtesy and quick response are some of the areas where management is
very serious. Although there has been appreciable improvement in the
recent past, but there is still need to do lot to achieve customers'
satisfaction.

The company is also contributing to the growth of
information technology in the country by offering high quality Digital
Lines, with special incentives for software exporters, Information
Technology and other educational institutions.

The company plans to embark on a number of new
projects especially in areas, such as DLS Fiber access & 10GB high
capacity transmission systems in back-bone network that will place the
Company in a leading position in the region. These achievements have
been possible due to concerted efforts of the management to strengthen
PTCL for the future challenges that it will face from developing
technologies and competition from the year 2003.

Recognizing the growth and opportunity in the
Cellular Mobile and data communications industry the PTCL is enhancing
its investment to expand the infrastructure facilities of its
subsidiaries namely PTML (Ufone) and Paknet.

Under the above-mentioned facts and figures, it is
obvious that PTCL is a telecom giant of more than half a century age and
continues by flourishing since the day of its inception. The end of its
monopoly might create some troubles in some areas, but the telecom giant
would remain number one giant in the country.